HTML Emails

I know there has been alot of talk regarding HTML emails....but can anyone please rehash for me.....I need to know....can we customize the Email default template to include embedded images for both configurations....of OUTlook 2003 as the email client or using ACT! internal email as the client ? I have tried both ways but the images in the email template always seem to come in as attachments......everyone else out there is using HTML....any guidance, suggestions would be appreciated....FYI...Using ACT 2006 Premium For Workgroups....Office 2003.....Thanks